The Great Office Divide

Brian Elliott

CEO, Work Forward & Publisher, Flex Index

Remember when everyone was convinced 2025 would be the year we'd all finally surrender and trudge back to our offices five days a week? Well, we're at the close of March, and while the numbers are up a bit that mass migration hasn't materialized. Instead, what I'm seeing is an increasingly stark divide between two types of companies.

In one corner: organizations that have accepted reality and reimagined their workplaces as tools for teams. In the other: companies paralyzed by executive indecision that has frozen workplace teams in place.

After conversations with workplace leaders at dozens of companies over the past month alone, the contrast couldn't be clearer. Those who have figured out that the workplace is an important tool, but we need to invest in rethinking it for today’s needs are accelerating ahead.

The Paralysis Epidemic

In a recent survey I conducted with about 30 senior Workplace leaders for a workshop, I found nearly half are stuck in a frustrating limbo:

🧊 Frozen in place: They've gone from somewhat underutilized office space pre-pandemic to massively underutilized now, but leadership won't align on reducing space. The cause? Some of their CEOs and execs are wondering if the latest "RTO or else!" headlines might (finally) signal a full return to 2019.

💸 No renovation budget: Meanwhile, their internal clients are begging them to ditch the massive open floor plans and give them more of what they need: spaces for teams to collaborate and some space to do quiet, heads-down work. But there's no willingness to fund the redesign. After all, attendance is too low…

🤦 Responsibility without authority: Most painful of all are the workplace teams being held accountable for improving office attendance. Here's the thing: workplaces can attract or repel employees, but what really makes people willing to commute is whether the trip "earns the commute." That's about team leadership building moments that matter, not free snacks.

For five years now, I've heard the same refrain from some executives: "Surely this is the year when we finally get back to normal." Time for a reality check: reality has changed.

Reality Check: What's Actually Happening with Offices?

The headlines about RTO demands may have quieted somewhat, but yes, more people are coming to offices more often – just nowhere near 2019 levels. And here's what most executives didn't realize: your office was probably only half-occupied pre-pandemic anyway.

Data from Placer.ai shows that while office visits have grown, there’s not a massive wave — and 2025 is not off to a roaring start for office utilization. Versus Feb of 2019, office visits this Feb were 36% lower this year and that’s worse than Feb of last year.

Kastle Systems data shows only a modest uptick over the past two years: about +3% on average to ~54% of pre-pandemic norms at peak weeks. Neither shows the massive surge you'd expect from all the executive chest-thumping about office returns.

There are clearly regional differences: NYC office vacancy rates have improved while San Francisco’s have stubbornly stuck at 37%. But even with (much of) Wall Street pressing people back and Federal leaders valuing compliance over productivity, occupancy will still likely remain 30-40% below 2019 levels.

But here's the kicker: offices were only half utilized in 2019. Most had 60-65% attendance on average. Peak days were higher, of course, but on any given day you had folks out on PTO, sick days, customer visits, and yes, working from home. That’s on the basis of badging data – did people show up.

If you look at sensor data, desks weren’t even that busy: Vergesense reported average space utilization was only 27% in 2019 with the peak at 72% – in a time with fewer distributed teams. Meeting rooms were just as bad – habitually occupied by the ghosts of that jerk who keeps booking the room but never shows up.

The upshot? If your office today has 40% of seats filled today, you're actually above average — unless you've already shrunk space, moved to hoteling desks, and redesigned to make the spaces work for 2025.

Note: right after I published this, in a webinar we did together Nic Halverson, CEO at Occuspace said that even at firms that have a five day a week mandate and threats of firings, people aren't coming back anywhere near full time: they’re seeing the same attendance as flex firms. Policies aren’t reality.

Last, if your CEO is waiting to see if everyone else is will follow Jassy and Dimon, research from Stanford and the Federal Reserve say they’re not: only 12% of CEOs with a flexible work policy plan to change it in 2025 – and that only goes up to 14% if there’s a recession.

P.s. Digging the data? Download my 50 page slide deck.

The Companies Moving Forward

Not everyone is stuck in debate mode. I've had the pleasure of talking with workplace leaders at companies that have moved beyond the "will they/won't they return" soap opera:

Atlassian has created spaces that work for teams while meeting the needs of people who need individual workstations and driven aligntment with leadership by overhauling workplace metrics. They've recognized market differences too—NYC has more young workers who need office space and will commute; folks in Austin simply won't.

Airbnb invested years ago in a small central team to support team connections and events (Ground Control) and are now reinventing their spaces to better serve a monthly in-person cadence built around their core business thythms – and next their global needs..

Those two and companies like Dropbox and Zillow are great examples of companies who have figured out how to save money while reinvesting in effectiveness. They've shrunk their office footprints but redeployed much of the savings into three critical areas:

1. Redesigning remaining spaces: Most space now prioritizes team interaction rather than individual work.

2. Funding gatherings: Teams get a budget for bringing distributed members together regularly.

3. Investing in enablement: Small, centralized teams provide leverage to leaders who need help running effective gatherings.

Dropbox shares the data out of their OPT (Offsite Planning Team) efforts. Last year, they ran over 250 offsites; OPT planned almost 100 of these,saving leaders over 2,000 hours of work while significantly boosting trust and communication. Like Upwork and Zillow, they've found that centralizing planning and vendor selection creates substantial savings that more than offset the investment.

This isn't just happening in tech. Allstate has saved over $240 million in office spending annually, and reinvested some of that into redesigned workplaces and $10 million annually for experiments in team connection.

Genentech created one of the best programs for team agreements I've ever seen, run by workplace experts who help leaders build better working methods—because they understand that investing in these capabilities creates leverage across the entire organization. By the way, Genentech is primarily in office – after all, hard to do R&D lab work in your garage. Even so, they use flexible office vendors to support the needs of groups like sales teams in different regions.

What they’ve all got in common? They get that the job isn’t just about facilities, it’s about faciltation of great experiences that build stronger organizations.

The Next Hills to Climb

Even these forward-thinking companies are grappling with three common challenges:

1. Leveraging flexibility: Workplaces aren't just owned and leased facilities anymore. Allstate now has 25 U.S. “flex hub” locations. Companies like PagerDuty (and many more!) use flexible providers for "overflow" spaces during events and peak needs—eliminating the expense of building for maximum capacity and paying year-round for underutilized space.

2. From central to local: Zillow orchestrates company-wide "zRetreats" for teams to reconnect and dive deep into their work. But there's also value in local connections; Allstate, HubSpot, and PagerDuty find that modest local investments can build community.

3. Muscle building: Even with fantastic in-person team building playbooks, it only matters if leaders actually use them. Everyone's working on helping leaders develop the EQ-based skills needed in the age of GenAI. Some of my favorite recent conversations are among workplace leaders sharing what’s worked for them to drive adoption.

There's more nuance to all these approaches, and I'll share specific stories in the weeks ahead. None of these companies has it all figured out—but they're investing in continuous improvement focused not just on real estate savings, but on enhancing team performance.

The future of work isn't about where we work—it's about how we work together for common purpose, build trust, and drive results. Offices can and should be a critical tool for making that happen. But if your leadership is still debating policy you’re falling further behind the curve.